Republic of Korea Announces Cap for 2018

On 19 December 2017, the Republic of Korea announced the cap for 2018 for the Korean Emissions Trading System (K-ETS) will be set at around 538.5 million tons for the close to 600 businesses under the K-ETS across 26 industries. This represents a 2.3% reduction from the 2017 cap, which was set at 551 million tons. The caps for 2019 and 2020 have not yet been set.

How these allowances will be allocated will be announced in the first half of 2018. Originally, the 2018 allocation plan was set to be finalized in June this year, however this was was delayed due to the prioritization of nuclear phase-out plans by President Moon following his election in May this year. The introduction of auctioning three percent of allowances to selected industries for the second phase of the K-ETS has also been postponed until 2019. The first K-ETS auctions are now scheduled for the beginning of 2019.

The Republic of Korea launched its ETS in 2015 to meet its 2030 target of curbing emissions by 37% below business-as-usual levels. The system covers 68% of national emissions and will have concluded its first phase at the end of 2017.